| | | | | | | | | | | | Opportunity to reclaim VAT on Deposit Payments | | | Do you take deposits or apply cancellation charges in your business?
If you are in the hotel, restaurant, conference or any business that takes deposits from it’s customers you may now be entitled to a refund of VAT. This is because there has been a change in the VAT treatment of forfeited deposits and cancellation charges.
Due to the ruling issued by the European Court of Justice (ECJ) in case c-277/05 Societe thermale d’Eugenie-Les-Bains, the Revenue has now revised it’s VAT treatment of:
a) a deposit, received by a supplier in respect of an order or request for a taxable supply of goods or services, when it is forfeit following a customer cancellation and where the supply has not taken place, and
b) a cancellation charge levied by a supplier where an order or request for a supply is cancelled by the customer and the supply does not take place.
The supplier may now reclaim any VAT already accounted for on such amount in the VAT return for the period in which the deposit is forfeit.
You can now claim a refund of the VAT accounted for and paid on forfeited deposits and cancellation charges going back over a four year period.
Affected businesses, such as hotels, exhibition/conference organisers, car hire companies, sports centers, or any business that receives non refundable deposits may now be entitled to a windfall of retrospective VAT refunds.
Property companies that take deposits should also consider the effect of this ruling.
If you require any further information or advice in relation to this matter please contact your professional adviser.
Remember you can file and pay your 2010 Income Tax Return through the Revenue Online Service (ROS) by 15th November 2011. | | | | Should you require any assistance in relation to this matter please email me here | | | | | | | | | | | |
| |
|
|
|
|
| | | | | | | | | |
|
|
